Exploring the ethical aspects of Islamic banking

2015 ◽  
Vol 8 (1) ◽  
pp. 85-98 ◽  
Author(s):  
Hasan Gilani
Keyword(s):  
Literature Review ◽  
Banking Sector ◽  
Financial Institution ◽  
Banking System ◽  
Recent Decade ◽  
Subject Area ◽  
Islamic Banking ◽  
Ethical Management ◽  
Content Type ◽  
The Subject

Purpose – The purpose of this paper is to look into the ethical practices of a profit-driven financial institution that is currently adopting Islamic banking and whether it can actually be ethical from an Islamic perspective. The recent decade has seen an upsurge of the increasingly integration of ethical management into operational strategies by businesses across the globe. Like any other religion, Islam wants its followers to be truthful and honest and to be compliant with its teachings and especially in a business transaction. This research paper explores the ethical factors of Islamic banking and how it is perceived by its stakeholders. Design/methodology/approach – Due to the exploratory nature of the research and the fact that it involves in-depth theoretical analysis, a qualitative research method was adopted to explore the details of ethics in Islamic banking sector. The aim of this research was to explore the ethical options of an Islamic bank. This was done by carrying out in-depth interviews with the managers and executives of Islamic banks having authority over the subject of Islamic banking and Shariah finance. Furthermore, a detailed session of interviews was also carried out with the customers of Islamic banking to take their views on the subject issues. The data are analysed through thematic content analysis and matched with the existing theory with the objective of coming up with detailed findings that would contribute to knowledge on the subject of ethical Islamic banking. Findings – The paper provides empirical insights about ethical management as a vital part of Islamic banking modus operandi. The findings highlight the involvement of ethics in different procedures, operations and approaches of Islamic banking and how it is perceived by its many stakeholders. Practical implications – The motivation of this thesis comes from literature review to explore the ethics of Islamic banking and how it Islamic banking is perceived by stakeholders at an ethical banking practice. This research aims to aid bankers in identifying what practices they can enhance and what practices should be dropped to bring about a more ethical banking system. This research was prompted as a result of the gaps identified in the literature review followed by the observations made of the market by the researcher. It was evident that further research on this topic was required to aid the subject. Originality/value – The research is original in its nature, as there have not been many instances where the ethical management theory has been explored within the Islamic banking sector. Given the new literature on corporate branding and customer perception, this research can contribute very positively towards the subject area. This research would pave new research avenues to be explored and enhance academic contribution on the common subjects.

Tawarruq application in Islamic banking: a review of the literature

2014 ◽  
Vol 7 (4) ◽  
pp. 485-501 ◽  
Author(s):  
Nasrun Mohamad ◽  
Asmak Ab Rahman
Keyword(s):  
Content Analysis ◽  
Literature Review ◽  
Design Methodology ◽  
Banking System ◽  
Future Research ◽  
Islamic Banking ◽  
Review Of The Literature ◽  
Content Type ◽  
Comprehensive Literature Review ◽  
The Subject

Purpose – This paper aims to present the results of a comprehensive literature review with regard to the application of Tawarruq in the Islamic banking system covering the period between 2011 and before. The review aims to synthesize the previous research, capsulize the structural overview inasmuch as future research might be oriented and identify the gaps and direction for future research. Design/methodology/approach – A range of published and unpublished documents was collated and filtered based on the defined rules to identify the determinants of the writing. The documents were then be classified into few segments in which content analysis was conducted to capsulize the essence of the subject matter described in the literature. Findings – The analysis demonstrates that most of the studies discussed the fundamental theories which concerning the area of jurisprudence, while a few of them did discuss the application aspect in the banking environment. However, none of the operational process is discussed in-depth, whereas the risk of Shari’ah non-compliance might arise in the detail transaction. Research limitations/implications – The databases used in the search might not contain all the documents that could be relevant for the review. Furthermore, the defined-rule for document searching and selection excluded the out-of-scope documents that might be relevant. Originality/value – This paper identifies the gaps that become apparent in the literature in assisting researchers to ascertain the interesting areas as well as the direction for future research.

Perception of stakeholders on governance dimensions of the Islamic banking sector

2019 ◽  
Vol 14 (4) ◽  
pp. 601-619
Author(s):  
Ibrahim Abiodun Oladapo ◽  
Roshayani Arshad ◽  
Ruhaini Muda ◽  
Manal Mohammed Hamoudah
Keyword(s):  
Banking Sector ◽  
Banking System ◽  
Simple Random Sampling ◽  
Islamic Banking ◽  
Policy Makers ◽  
Content Type ◽  
Stakeholder Groups ◽  
Body Of Knowledge ◽  
Form Part ◽  
Global Growth

Purpose The perception of different stakeholder groups on governance dimensions, such as transparency, accountability and ethics, in the Islamic banking sector is examined, given the global growth of Islamic banking and its purpose of enhancing economic growth and development through Shari’ah-compliant instruments. The purpose of this paper is to determine whether the stakeholders in Nigeria perceive each dimension differently. Design/methodology/approach The data for the study were collected using a survey questionnaire. Simple random sampling was used to select the respondents. The respondents are customers, employees and shareholders of the Islamic banking sector in Nigeria. Findings Findings show that ethics is highly perceived as the key dimension in governance for the Islamic banking sector, whilst a positive and significant relationship is observed between the variables. Based on the variance analysis, there were statistically significant differences in perception between the stakeholders groups in the Islamic banking system. However, similar positive perceptions are accorded towards the overall governance dimensions across stakeholder groups namely, customers, employees and shareholders. Originality/value This study will extend the current body of knowledge in the field of Islamic finance by providing insights into policy makers, operators and regulators of the Islamic banking sector in Nigeria on the prospective stakeholders’ level of perception of the governance dimension, which could form part of the solutions to many contemporary issues in the banking system. This contribution is important, considering the clear relationship among governance dimensions which should be viewed in light of Islamic ideals.

Meezan Bank: category leader in Islamic banking

2017 ◽  
Vol 7 (4) ◽  
pp. 1-23
Author(s):  
Amber Gul Rashid ◽  
Obaid Usmani ◽  
Lalarukh Ejaz ◽  
Hasan Faraz
Keyword(s):  
Banking Sector ◽  
Secondary Data ◽  
Subject Area ◽  
Islamic Banking ◽  
Main Theme ◽  
Content Type ◽  
Documentary Analysis ◽  
Doing Business ◽  
Long Time ◽  
Pros And Cons

Subject area Islamic Banking has been in the limelight since the recession of 2008. Although around for a long time, it is enjoying a renaissance of sorts. This case provides an introduction. Study level/applicability EMBA and/or MBA introduction to banking, senior semester undergraduate, specialization in Islamic Banking. Case overview This case is written in the form of an interview with Meezan Bank, one of the leading financial institutions in the Islamic banking sector. It is based on primary as well as secondary data obtained via interviews and documentary analysis. Expected learning outcomes This is an analytical case and not a decision-making one. The main theme of the case revolves around analysing what Islamic banking is, the challenges that Meezan has faced, the pros and cons of doing business this way and the future issues it can face. Supplementary materials Teaching Notes are available for educators only. Please contact your library to gain login details or email [email protected] to request teaching notes. Subject code CSS 7: Management Science.

Contemporary Islamic economic studies on Maqasid Shari’ah: a systematic literature review

Humanomics ◽  
2017 ◽  
Vol 33 (3) ◽  
pp. 315-334 ◽  
Author(s):  
Akilu Aliyu Shinkafi ◽  
Nor Aini Ali
Keyword(s):  
Economic Development ◽  
Literature Review ◽  
Human Resource Development ◽  
Management Policy ◽  
Islamic Banking ◽  
Security Risk ◽  
Content Type ◽  
Banking And Finance ◽  
The Subject ◽  
New Research

Purpose The purpose of this paper is to come-up with a systematic exertion on Maqasid Shari’ah in Islamic economics, banking and finance, with a clear focus on forming an appropriate and novel framework that identifies the effort of contemporary scholars and detects the existing gap that might possibly champion new research commitments. Design/methodology/approach A systematic approach to literature review was steered through the means propagated by the Centre for Reviews and Disseminations (DSR), but modified to the precise requirements of this review. Google Scholar was searched throughout the passage. The search criteria are confined to English documents that are within the period of 2006-2016. Articles that did not score or did not convince that the subject of Maqasid Shari’ah has been applied in Islamic economy, Islamic banking, Islamic finance, Islamic financing products and economic development are excluded. Appropriate search keys are used to gather better results. Findings The findings inform that contemporary scholars show a robust commitment to the themes of the result during the stated period. The outcome reveals that contemporary scholars designate more interest and attention on Islamic banking and expose their potential specialty in the expanse than other themes. The study further highlighted the gap of some significant areas that are either outside the coverage of the reviewed documents or require more attention from contemporary scholars, for instance, wealth formation and management, wealth consumption, socioeconomic security, risk management, corporate governance, management policy, human resource development, prohibition of Riba, profit and loss sharing (PLS), etc. Research limitations/implications The paper is limited to contemporary aspects of Islamic economics, banking, finance and economic development that have a link with the subject of Maqasid Shari’ah. Practical implications A review of these scholarly reported documents has the potential to draw attention toward filling the existing gap that will likely result in salvation of current issues on the subject of Maqasid Shari’ah that has a direct association with Islamic economy, banking and finance. Originality/value The paper is original in its nature considering the fact that it is assumed as the maiden attempt of its kind in the field. It is a treasure to all those who may cherish and find it relevant in their progressive and rounded convention or application on the matter.

Does the tag “Islamic” help in customer satisfaction in dual banking sector?

2019 ◽  
Vol 10 (1) ◽  
pp. 138-149 ◽  
Author(s):  
Fayaz Ahmad Lone ◽  
Ulfat Rashid Bhat
Keyword(s):  
Customer Satisfaction ◽  
Banking Sector ◽  
Banking System ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type ◽  
Level Of Satisfaction ◽  
Alternative Approach ◽  
Future Strategy ◽  
Conventional Banks

Purpose The purpose of this paper is to find out the importance of the tag “Islamic” in the title of banks. This will help to determine the future strategy of Islamic banks, while expanding to the countries where Islamic banking is seen as a religious banking and not an as an alternative approach to the conventional banking. Design/methodology/approach Adopting convenience sampling, a total of 596 customers of both Islamic and conventional banks were surveyed from four regions of Saudi Arabia (Makkah, Madinah, Riyadh and Dammam) using a self-structured questionnaire on a five-point Likert scale. Findings The results concede that Islamic banks without the tag “Islamic” and conventional banks have same customer satisfaction. There are some factors other than the tag “Islamic” which are driving customers towards Islamic banking. Those factors include physical aspects of the bank, level of satisfaction with the services, dealing and attendance by the staff and safety and security of the bank. Besides, the application of fundamental principles of Islamic banking works as a key motivation for customer satisfaction with Islamic banking. Practical implications Applying the tag “Islamic” is not as important as implementing the principles of Islamic banking. Islamic banks can survive and compete well even without using the “Islamic” tag if they implement the prime principles of Islamic banking and work on improving the factors highlighted by this study. This study can prove to be helpful in the expansion of Islamic banking in the countries where religious banking is not generally preferred by customers. Originality/value This is the first study to find out the customer satisfaction in a dual banking system (comprising of conventional banks and Islamic banks that do not use the tag “Islamic”), thereby filling the existing gap in the Islamic banking literature.

Implementing Web 2.0 tools in organisations: feasibility of a systematic approach

2014 ◽  
Vol 21 (1) ◽  
pp. 6-25 ◽  
Author(s):  
Gavin James Baxter ◽  
Thomas M. Connolly
Keyword(s):  
Literature Review ◽  
Web 2.0 ◽  
Empirical Evidence ◽  
Best Practice ◽  
Subject Area ◽  
Web 2.0 Tools ◽  
Content Type ◽  
Implementation Model ◽  
Scoping Literature Review ◽  
The Subject

Purpose – The aim of this paper is to examine the subject area of implementing Web 2.0 tools in organisations to identify from the literature common issues that must be addressed to assist organisations in their approach towards introducing Web 2.0 tools in their workplace. Based on the findings of the literature a Web 2.0 tools implementation model is presented. Design/methodology/approach – A general scoping review of the literature will be conducted to identify potential issues that might impact on the implementation of Web 2.0 tools in organisations to provide an overview of examples of empirical evidence that exists in this subject area with a view to examining how to advance this particular field of research. Findings – The findings of the scoping literature review indicate that while certain conceptual models and frameworks exist on how to implement Web 2.0 tools in organisations there is a lack of evidence to suggest that they have been empirically tested. The paper also notes that though organisations are unique, based on the literature common features can be found regarding “best practice” on how to introduce Web 2.0 tools in organisations. Research limitations/implications – This paper does not present any findings based on an empirical study involving the implementation of Web 2.0 tools in organisations. The paper does however provide scope for both academic and management practitioners to adopt and test the models and frameworks identified in the literature review when implementing Web 2.0 tools in their organisations. Originality/value – The contribution to knowledge that this paper provides is that it reviews an area where there is a lack of empirical evidence, namely, in the approaches that organisations can adopt when implementing Web 2.0 tools. Based on the findings from the literature and through the creation of a Web 2.0 tools implementation model, this paper provides practical guidance to management practitioners who might find introducing Web 2.0 tools into the workplace a challenge.

State ownership and bank performance: conventional vs Islamic banks

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Turki Alshammari
Keyword(s):  
Banking Sector ◽  
Banking System ◽  
Positive Influence ◽  
State Ownership ◽  
Bank Performance ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type ◽  
Banking Systems ◽  
The Impact

Purpose This paper aims to examine the effect of state ownership on bank performance for all banks in the Gulf Cooperation Council (GCC) countries during the period 2003 – 2018, for two distinct banking systems: the conventional and the Islamic banking systems. Design/methodology/approach To achieve the goal of the study, this paper uses a mean t-test to examine the mean difference of the related variables for both banking systems, and a regression test (using the GMM method) to explore the effect of state ownership on bank performance. Findings The most important result of the analysis is that state ownership has a significantly positive influence on bank performance for conventional banks but not for Islamic banks, in the GCC area. Originality/value This study adds to the scarce related literature comparative empirical results with respect to the impact of ownership on the performance of two different banking systems: the conventional system and the Islamic banking system in the GCC area. This study is likely to have implications for policymakers in terms of developing rules relevant to the governance of GCC’s two banking systems that can help to support the stability of the whole banking sector.

Islamic Banking in Nigeria: Issues and Prospects

2016 ◽  
Vol 4 (2) ◽  
pp. 34 ◽  
Author(s):  
Nuruddeen Abba Abdullahi
Keyword(s):  
Public Awareness ◽  
Banking System ◽  
Islamic Banking ◽  
Secondary Sources ◽  
Banking And Finance ◽  
Adequate Knowledge ◽  
Islamic Religion ◽  
Developmental Opportunities ◽  
The Subject ◽  
Nigerian Banking

The Nigerian banking reform precipitated the adoption of Islamic banking and finance in 2009 as additional door to banking mechanism in the country. However, the implementation of the Islamic banking or non-interest banking has generated a lot of debate, specifically because its foundations are based on Islamic religion. This paper briefly reviews the concept, the challenges and prospects of Islamic banking in Nigeria. The paper relies on the secondary sources by reviewing and analysing various works on the subject. A reflection on the size of its population and the developmental opportunities indicates that Nigeria has the prospect of becoming the hub centre of Islamic finance in Africa. Yet there are numerous challenges to the development of the Islamic banking system in the country, including misrepresentation of the system, lack of linkages and investment institutions, lack of adequate knowledge, as well as shroud business ethos and corruption, which is endemic in the country. The paper recommends the need for greater public awareness about Islamic banking and creation of enabling environment (i.e. the legal, accounting and taxation systems) for the working of Islamic financial system.   

Dispute resolution in the Islamic banking industry of Tanzania: learning from other jurisdictions

2016 ◽  
Vol 9 (1) ◽  
pp. 125-142 ◽  
Author(s):  
Abdul-Nasser H.R. Hikmany ◽  
Umar A. Oseni
Keyword(s):  
Dispute Resolution ◽  
Dispute Settlement ◽  
Banking Industry ◽  
Banking System ◽  
Legal Framework ◽  
Policy Framework ◽  
Islamic Banking ◽  
Court System ◽  
Content Type ◽  
Good Policy

Purpose This paper aims to examine the prospects of a dispute resolution framework for the Islamic banking industry in Tanzania under the existing legal framework. Design/methodology/approach This paper is based on comparative study by drawing significant lessons from other jurisdictions, and argues that to avoid some of the initial drawbacks in the dispute resolution framework for Islamic banking transactions in more advanced jurisdictions like Malaysia and United Kingdom, it is important for Tanzania to get it right from the onset to effectively manage Islamic banking disputes. Findings The study finds that apart from the court system which provides the main avenue for Islamic finance litigation, other processes such as arbitration and mediation which are deemed to be more sustainable could also be developed for effective dispute management. Research limitations/implications The study focuses on Tanzania banking system with comparison to other jurisdictions. Practical implications An increase of Sharī’ah-compliant products in Tanzania has led to the establishment of a number of Islamic banks. This study demonstrates the need for Tanzania to make use and/or make adjustment of its laws for effective dispute settlement of banking-related disputes. Originality/value This study appears to be the first paper to draw significant experiences from other jurisdictions to resolve Islamic banking disputes in Tanzania. It is expected to provide a good policy framework for the stakeholders in the Islamic banking industry in Tanzania.

Does social reporting matter? Empirical evidence

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Adel Sarea ◽  
Monsurat Ayojimi Salami
Keyword(s):  
Performance Indicators ◽  
Voluntary Disclosure ◽  
Financial Institution ◽  
Negative Relationship ◽  
Social Reporting ◽  
Future Research ◽  
Islamic Banking ◽  
Cross Sectional ◽  
Content Type ◽  
Gcc Countries

Purpose This paper aims to examine the level of Islamic social reporting (ISR) disclosure of Islamic banking in Gulf Cooperative Council (GCC) countries using a checklist based on Accounting and Auditing Organization for Islamic Financial Institution (AAOIFI) standards. Design/methodology/approach A quantitative method – Tobit Model – is adopted in this study. The unweighted disclosure method used to measure the ISR disclosure checklist consist of 51 items in Islamic banks (IBs) in the GCC countries. The stakeholder theory and legitimacy theory are used to investigate the possible banking performance factors affecting the accounting practices such as ISR disclosure in IBs. Findings The findings show that the ISR disclosure index is linked to the IBs’ performance indicators in GCC countries. The result indicates both Islamic banking profitability and age establish positive and statistically significant relationship with ISR disclosure while leverage establishes significant negative relationship with ISR disclosure. This implies that Islamic banking profitability, leverage, and age are essential bank performance indicators that make ISR disclosure worthy of doing even in the presence of Islamic bank stakeholders in GCC countries. This finding linked compliance with the mandatory disclosure recommendations of AAOIFI Standard No. 7, as well as voluntary disclosure. Research limitations/implications This study used cross sectional data for the year 2019, which is considered more recent despite its being a year data analysis. However, future research should consider mix method as well as more analysis tools provided their number of observations are sufficient enough. Social implications The study identifies the factors that may enhance Islamic financial institutions, including Islamic banking in GCC countries, to comply with ISR disclosure. The application of this study supports Accounting standards setters to consider standards that support ISR disclosure in Islamic banking in different countries. Originality/value To the best of the authors’ knowledge, this study is novel in exploring the level of ISR disclosure in Islamic banking in GCC countries by using a checklist based on AAOIFI standard No. 7 and establishes the relationship between ISR disclosure index and IBs profitability, leverage, as well as age of Islamic banking in operation.

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